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Council should go big on affordability crisis

The city has landed an affordable housing deal that requires Brookfield Residential to make 1,000 new housing units in their 10,000-unit Easton Park development available as affordable housing. The first phase for 188 single-family homes is under construction. RICARDO B. BRAZZIELL/AMERICAN-STATESMAN

What truly constitutes a crisis in Austin?

That is a fair question, given city leaders’ feeble response over the past several years to Austin’s affordability crisis. At best that response has been incremental, lacking the big ideas or major repositioning of resources required to address a crisis.

But it doesn’t help those who are being pushed out of the city because they no longer can afford to rent or buy a home in Austin’s hot housing market. Such trends, unabated, could severely damage Austin’s dynamic cultural fabric, which enhances its creative economy and hipster appeal.

The deal calls for the City Council to waive $51 million to $80 million in fees for the developer of the Easton Park project in Southeast Austin’s Pilot Knob area in exchange for the developer committing to make 10 percent of the housing units affordable.

That would yield 650 single-family homes — of the planned 6,500 — to be sold to people who earn 80 percent or less of Austin’s median family income, which is $61,450 for a family of four. But here’s the thing: Those 650 homes would be affordable in perpetuity through a land trust or other such mechanism so that they remain in the hands of lower-income homebuyers forever.

Another 350 rental units would be reserved for low-income households for a 40-year period. Renters would have to make 60 percent or less of median family income.

One misunderstood fact about the deal is the belief that the developer is no longer paying $51 million to $80 million in fees to the city. The developer is paying those fees, but instead of the fees going to the city’s water utility department, the city would divert those fees to the Austin Housing Finance Corporation to purchase lots from the developer for affordable homes or help with down payments on those homes.

Typically, the developer pays such fees to the city’s water utility department to cover costs of new development hooking into the water utility’s system or other infrastructure needed to serve a new development. Critics have blasted the deal for “blowing a $50 million hole” in the water department’s budget.

But the actual “hole” would amount to less than $2 million a year since the fee waivers would be spread over the life of the project, about 30 years. That is less than 1 percent of the water utility’s annual $525 million 2016 budget.

And it was wrongly sold as a freebie for the city, when there is a fiscal impact. Intentional or not, the damage is done in the perception that Garza, Adler, or their staffs, hid key information from the council and the public.That must be cleared up by making all of the deal’s specifics public.

Other questions also need answers: Did the city give up too much in the deal, does it fit with the city’s smart housing policy, does it violate city code requiring the city manager to prepare a fiscal note — and can it be reversed should the water utility’s finances stumble?

Those answers are important. But they shouldn’t foil other such big ideas from emerging. And the council should take a page from its past on that.

When dealing with an environmental crisis in the 1990s, community organizers, including Brigid Shea and Bill Bunch, led efforts to put the city’s Save Our Springs ordinance on the books. As the crisis escalated into wars between business groups and environmentalists, then-Austin Mayor Kirk Watson brokered smart growth and housing policies aimed at steering development away from Austin’s beloved Barton Springs and environmentally sensitive terrain in a way that permitted growth to prosper.

In some cases it meant spending millions of public dollars — about $300 million since 1992 — to buy land to serve as open space. It meant bringing hard-charging developers and impassioned environmentalists to the table and cutting deals. The city reset its priorities with the awareness that they were acting for the public good.

But where is the comparable response to today’s crisis that is reshaping Austin in some very profound — and negative — ways?

Consider that no large metro area in the country is more economically segregated than Austin, according to a 2015 report that underscores growing concerns about the divides in Central Texas and the impact they could have on the region’s economic prosperity. Austin stands out as a city that is growing rapidly, but is losing its share of African Americans.

Those trends are compounded by massive gentrification in central East Austin, which has displaced major portions of Austin’s Latino and black communities and wiped out much of the most affordable places in which to live in the central city.

Those shifts are changing ideas of such things as urban sprawl, a term once used to describe the voluntary exodus of middle- or more-affluent residents from central city neighborhoods to the suburbs, aka white flight. Now sprawl is in the reverse, with people of color being forced to the city’s outer limits or beyond to find affordable housing.

When it came to Austin’s environment, city leaders used nearly every tool in the box to help resolve that crisis. No less is needed to address Austin’s affordability crisis.

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Here's where the American-Statesman's editorial board members give their take on the news of the day, as well as give insight and analysis on the issues that matter to Central Texans. On occasion, the Viewpoints blog will serve as additional space for editorials that reflect the opinion of the American-Statesman. And, from time to time, readers will find contributions from special guests. Blog contributors include: Juan Castillo, Alberta Phillips and Gissela SantaCruz.